A.K.SIKRI,J. - (1.) All these appeals involve identical dispute, which pertain to classification of the goods known as Polyester Covered Yarn and Nylon Covered Yarn. Whereas the appellants/assessees argue that these products are covered by Chapter No. 56 and come under CSH No. 5606.06, the Revenue has taken the position that the aforesaid goods fall in CSH No. 5402.62/61. The stand of the Revenue has been accepted by the Customs Excise and Service Tax Appellate Tribunal (for short 'CESTAT') which is challenged by the assessees in these appeals. For the sake of convenience, we shall take note of the facts from Civil Appeal Nos. 5805-5807 of 2009.
(2.) The aforesaid two products, namely, Polyester Covered Yarn and Nylon Covered Yarn are manufactured by the appellants by applying the process of conventional covering on machine - MENEGATTO - Model 1500/2000 and also separately by applying the process of air covering on machine SSM-DP2-C. The dispute pertains to the goods manufactured with the application of air covering process. This process of air covering is as under: The Lycra/Spandex Spool is loaded on the feeder and nylon or polyester is loaded on the Creel. Then the Lycra or Spandex is drafted to certain extent i.e. as per the requirement of quality. Then the Nylon/polyester & Lycra/Spandex is passed through the air jet where the covering takes place. Finally the covered yarn is wound on paper tube.
(3.) It is an admitted case that upto July, 2001, the assessees were themselves covering these yarns under Chapter No. 54 and paying duty accordingly. As per them, it was noticed that Custom Department was acquiring such yarns on importation under Chapter 56. The assessees were advised that the yarns in question are to be classified under Chapter No. 56 and not Chapter No. 54 and, therefore, after intimating the Department, they started effecting the clearances under CSH No. 5606.06 w.e.f. July, 2001.;